Trade Terms Reference

Incoterms Quick Reference

Plain-English overview of cost/risk transfer across common Incoterms.

Quick guide

What you need to know before you move forward.

Start with the highlights below, use the checklist to prepare your shipment or paperwork, then jump to the chapter that matches the issue you are working through.

Choose a term that matches the actual logistics model, not just the quote stage.

Verify the Incoterms version in the commercial contract.

Check who is responsible for freight, insurance and destination charges.

Make sure invoice wording matches the agreed term exactly.

Core Purpose

Cost + risk split

Incoterms define who pays for and carries risk across key movement stages.

Not Included

Local law override

They do not replace customs, insurance or transport contracts.

Best Use

Invoice alignment

Use the chosen term consistently across your quote, contract and invoice.

Agree

Select the term that reflects the commercial handover point between seller and buyer.

Map Costs

Identify who covers packing, inland movement, freight and destination-side charges.

Map Risk

Confirm where transport risk transfers so the parties can align insurance expectations.

Document

Carry that term through the invoice and shipping documents without variation.

Overview

Incoterms allocate responsibilities for cost, risk transfer, and key handover points between seller and buyer. This guide is intended as a practical interpretation aid when preparing export invoices and shipment documentation.

Operational focus

How to Use Incoterms in Shipment Planning

Choose terms that match the commercial agreement and the actual logistics model. Incoterms do not replace transport contracts, insurance policies, or customs laws, but they do define who is expected to arrange and pay for major movement steps.

Why this matters

Choose terms that match the commercial agreement and the actual logistics model.

Incoterms do not replace transport contracts, insurance policies, or customs laws, but they do define who is expected to arrange and pay for major movement steps.

Content emphasis

Actions

Limits

Docs

Prep

This chapter leans most heavily on the topics with the tallest bars.

Operational focus

What the Reference Covers

The source sheet is most useful as a comparison tool. It lets you check, side by side, which party is expected to organise or fund each major step in the shipment so the invoice and booking assumptions stay aligned.

Why this matters

The source sheet is most useful as a comparison tool.

It lets you check, side by side, which party is expected to organise or fund each major step in the shipment so the invoice and booking assumptions stay aligned.

What to check

Which party covers packing, documents, inland transport, wharfage, export customs, freight, insurance, and destination/import charges.
A side-by-side view of terms from EXW through DDP.
A note that some terms in the sheet are recommended for sea freight contexts.

Operational focus

Practical Caution Points

The same Incoterm can produce different operational outcomes depending on lane, carrier, and contractual carve-outs. Confirm exact version usage in the commercial contract and ensure invoice terms match the selected Incoterm.

Why this matters

The same Incoterm can produce different operational outcomes depending on lane, carrier, and contractual carve-outs.

Confirm exact version usage in the commercial contract and ensure invoice terms match the selected Incoterm.

Content emphasis

Actions

Limits

Docs

Prep

This chapter leans most heavily on the topics with the tallest bars.

Operational focus

Acronym Set in Source Reference

The acronym list is a quick lookup reference, not a recommendation to use every term. Choose the term that reflects the actual commercial agreement and mode rather than selecting one purely because it appears familiar.

Why this matters

The acronym list is a quick lookup reference, not a recommendation to use every term.

Choose the term that reflects the actual commercial agreement and mode rather than selecting one purely because it appears familiar.

What to check

EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAF, DES, DEQ, DDU, DDP.
The sheet notes Incoterms are issued by the International Chamber of Commerce.